Histone lysine (K) methylation has emerged as a key epigenetic mark associated with transcriptional regulation of gene expression. In particular, trimethylation at histone H3 lysine 27 (H3K27me3) is linked with gene silencing, whereas trimethylation at histone H3 lysine 4 (H3K4me3) is highly correlated with gene activation. H3K4me3 and H3K27me3 occupy and affect 68-75% and 7%, respectively, of all human gene- regulatory regions in embryonic stem cells and play critical roles in numerous epigenetic processes, including stem cell differentiation. Interestingly, these two types of methylation with opposing roles co-occupy many promoter regions, forming so-called bivalent domains that can be resolved to monovalent domains containing only H3K4me3 during cellular differentiation. Bivalent domains are transcriptionally inactive, indicating a dominant role for H3K27me3 over H3K4me3. Recently, we identified the H3K27 demethylase KDM6A (also called UTX), a long-sought histone methylation modifier that up-regulates gene expression by demethylating H3K27me3. Our long-term objective is to define the epigenetic role of KDM6A in stem cell differentiation. Our KDM6A knockdown experiments indicate that KDM6A acts as a key epigenetic regulator for retinoic acid- induced differentiation of the human stem cell line NT2/D1. Importantly, we previously showed that KDM6A interacts with the H3K4 methyltransferases mixed-lineage leukemia (MLL) 3/4 in a histone modifier complex. Therefore, the KDM6A complex is able to catalyze enzymatic processes for both H3K4 methylation and H3K27 demethylation by which bivalent domains can be resolved to monovalent domains. Consistent with this, our additional preliminary data indicate that in both NT2/D1 and the ES cell line H9, KDM6A contributes to the resolution of bivalent domains at the promoters of several key development/differentiation-specific HOX genes. Based on these exciting preliminary results, our central hypothesis is that KDM6A plays an essential role in stem cell differentiation by modifying key epigenetic signatures, such as bivalent domains, in cooperation with its associated proteins. The focus of this proposed study is on understanding the functions of KDM6A and its associated proteins in mediating stem cell differentiation and their roles in modifying epigenetic signatures of stem cells. Here, we propose the following three specific aims: 1) Characterize the role of KDM6A in mediating stem cell differentiation; 2) Determine the role of KDM6A in modifying bivalent domains; and 3) Define the roles of the KDM6A-associated proteins in KDM6A-mediated cellular differentiation. These studies will uncover the unprecedented roles for the epigenetic modifier KDM6A and its cofactor proteins in stem cell differentiation and are fundamental to our understanding at the molecular level of how key epigenetic signatures, such as bivalent domains, are modified during stem cell differentiation.